Harcourts South Africa welcomes the surprise announcement by The South African Reserve Bank (Sarb) to cut the repo rate by a further 100 basis points, bringing it down to 4.25% and the Prime Lending Rate now stands at 7.75%. This is undoubtedly due to the effects on the economy by the COVID-19 pandemic in an attempt to alleviate some of the pressures South Africans face.
We welcome this decision as it makes buying a home more affordable and boosts consumer confidence which translates into increased economic activity in these uncertain times.
The economy has been embattled for some time now and a few weeks ago Sarb explained that the GDP growth outcome for the third quarter in 2019 confirmed that the economy remains weak and vulnerable to idiosyncratic shocks and poor sectoral performances.
The man on the street is certainly bearing the brunt of an economy under serious pressure and as the long term affects remain unclear at this point this announcement today will help many consumers breathe a sigh of relief and help mitigate the ominous situation we face from a financial perspective.
In its latest Monetary Policy Review, the Sarb explained that South Africa’s economy was expected to contract by between 2% and 4% this year with the lockdown being extended.
We acknowledge that we have been faced with an enormous health crisis and we continue to remain guided by the President and his Government who seem to be doing everything they can to balance an impossible task.
Statement by
Richard Gray
CEO Harcourts South Africa